Press release

Lasting Powers of Attorney are coming - but there is still time to set up a less expensive Enduring Power of Attorney if you act quickly

20-Apr-07
Lasting Powers of Attorney are coming - but there is still time to set up a less expensive Enduring Power of Attorney if you act quickly says solicitor Margaret Marshall

Since 1984 it has been possible to anticipate and plan for a person’s possible loss of mental or physical capacity by setting up an Enduring Power of Attorney (EPA). EPAs allow individuals (donors) to appoint one or more people (attorneys) to deal with their property and financial affairs if they become mentally or physically incapable in the future. They are usually set up to be a worst case scenario document, only needing to be used if the individual becomes incapacitated.

Absence of an EPA in such circumstances requires application to the Court of Protection, by family or friends, to appoint a Receiver to deal with the affairs of the person who has become incapacitated - a costly and protracted process.

An EPA is thus a convenient instrument which many older people in particular set up in order to simplify their lives, and the lives of their immediate families, to mitigate the consequences if and when they should lose capacity. They are convenient and easy to set up and relatively cheap with most solicitors charging between £140 and £180. If, after being set up, the EPA never has to be invoked then no further cost will be incurred.

However, the Government is planning to abolish EPAs in October of this year. At that time Lasting Powers of Attorney (LPAs) will come into effect.

The good news is that an LPA allows for the appointment of both a Health & Welfare attorney and a Financial & Property attorney, which an EPA does not. The former would be a person thought appropriate to look after the person’s health and welfare issues, the latter someone with more financial and commercial acumen.

However there is also bad news, which comes in more than one respect. Firstly, whereas an EPA has to be registered only in the event the donor loses capacity, an LPA has to be registered immediately and before the attorney(s) can use it. This means that the cost immediately increases and must be incurred whether or not the LPA is ever used.

Secondly, the forms involved are much longer and more involved - meaning that the attendant legal advice will be costlier.

Thirdly, the overall cost of setting up and registering an LPA will be substantially more than that involved with an EPA and will have to be met at the time. Although precise registration fees have not yet been published early estimates indicate that the total cost of setting up an LPA may be as much as £800, perhaps more. Remember that the equivalent cost of establishing an EPA is £140 - £180!

If your main concern is appointing attorneys to deal with your financial affairs if you become mentally incapable in the future, or you simply want your family to assist you now, we would strongly recommend you consider making an EPA while you still can. Any EPA drawn up before October 2007 will remain valid indefinitely.

Margaret Marshall is a solicitor specialising in Private Client Services with High Wycombe solicitors Reynolds Parry Jones (Margaret.marshall@rpj.uk.com telephone 01494 525941).